Filed 7/11/19
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
OXFORD PREPARATORY ACADEMY, D074703
Plaintiff and Appellant, (Super. Ct. No. CIVDS1710045)
v.
CHINO VALLEY UNIFIED SCHOOL DISTRICT et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of San Bernardino County, David
S. Cohn, Judge. Reversed and remanded with directions.
Theodora Oringher, Brian J. Headman, Jon-Jamison Hill; Connor, Fletcher &
Hedenkamp, Edmond M. Connor, Matthew J. Fletcher, and Douglas A. Hedenkamp for
Plaintiff and Appellant.
California Charter Schools Association, Ricardo J. Soto, Julie Ashby Umansky,
and Phillipa Altmann for amicus curiae on behalf of Plaintiff and Appellant.
Law Offices of Margaret A. Chidester & Associates, Dylan E. Conroy, Steven R.
Chidester, and Margaret A. Chidester for Defendants and Respondents. This appeal arising from a mandamus action in the superior court presents novel
issues regarding the proper scope of judicial review of a school district's decision to deny
a petition to renew a charter school. Below, the trial court concluded it had to apply an
extremely deferential standard of review because it believed the governing board of the
Chino Valley Unified School District (District) was performing a quasi-legislative action
when it denied the renewal petition submitted by Oxford Preparatory Academy (the
Academy), an existing charter school within the District. Finding that the District's
decision was not arbitrary or capricious, the trial court denied the Academy's writ
petition.
On appeal, the Academy contends the trial court applied the incorrect standard of
review because the District's decision was quasi-judicial in nature and, therefore, the trial
court should have applied a less deferential standard of review.
In this matter of first impression, we conclude that a school district's decision
pursuant to Education Code sections 47605 and 476071 to deny a charter school's
renewal petition is a quasi-judicial action subject to review via a petition for
administrative mandamus. In considering a renewal petition, the school district is not
acting in a legislative function by creating new policy, but rather performing a quasi-
judicial function by applying existing standards and rules defined by state statute to
determine whether the evidence presented by the charter school regarding its past
1 All further statutory references are to the Education Code unless otherwise specified. 2 performance is sufficient to satisfy those standards. The applicable statutes allow the
District to deny a renewal petition only after conducting a hearing and making specific
factual findings. This process bears all the hallmarks of a quasi-judicial action.
Additionally, we conclude that after a charter school's initial petition is approved by a
school district, the petitioner has a fundamental vested right to continue operating the
charter school such that a school district's decision that deprives the petitioner of that
right is subject to independent judicial review.
The trial court did not apply these standards when reviewing the District's
decision. Accordingly, we must reverse and remand for reconsideration of the
Academy's writ petition under the correct standards.
FACTUAL AND PROCEDURAL BACKGROUND
In 2009, the District granted the Academy's initial petition to open a charter school
within the District. The Academy opened in the fall of 2010 for its first school year and
ultimately enrolled approximately 1,200 children in kindergarten through eighth grade.
Near the end of its initial two-year charter, the Academy sought and obtained a
five-year renewal to operate its charter school through June 30, 2017. As the end of the
renewal period approached, the Academy submitted a petition for renewal to the District
in January 2016. Due to concerns regarding financial irregularities and the Academy's
governance structure, the District board denied the renewal petition in March 2016.
In response, the Academy made significant changes to its structure and financial
relationships to address the District's concerns. It then submitted a new renewal petition
reflecting these changes in September 2016. In its 617-page petition, the Academy
3 detailed its academic success over the past five years, relying on academic test scores and
other metrics to claim it was "the top performing K-8 public school in San Bernardino
County."
As required by state law, the District held a public hearing on the renewal petition
in October 2016. At its next meeting in November, the District board voted unanimously
to deny the renewal petition. In a detailed 62-page resolution, the board made numerous
findings of fact to support its conclusions that: (1) the Academy was "demonstrably
unlikely to successfully implement the program set forth in the . . . charter renewal
petition. [Citation]"; (2) the "renewal petition fails to contain reasonably comprehensive
descriptions of eight of the fifteen required elements of a charter petition. [Citation]";
and (3) the "charter renewal petition fails to provide all of the required affirmations and
assurances required to comply with California State law. [Citation.]"2 (Boldface
omitted.)
Following the procedures defined by state law, the Academy appealed the
District's decision to the San Bernardino County Office of Education, which declined to
consider the appeal. The Academy then appealed to the California State Board of
Education, which denied the appeal.
2 The District's decision is supported by detailed factual findings regarding its concerns about the Academy's leadership and financial irregularities. We do not delve into the details of those findings not because we consider them to be inconsequential, but rather because they are irrelevant to our analysis. For the reasons discussed post, our holding as to the preliminary error by the trial court regarding the proper standard of review precludes our analysis of the merits of the District's decision. We express no opinion as to whether the District's decision is supported by sufficient evidence. 4 The Academy then sought judicial relief. It filed a petition for writ of mandate in
the superior court and requested a temporary restraining order to allow it to continue
operation during the pendency of the lawsuit. The trial court granted the restraining order
pending its final decision.
The Academy argued that it was seeking writ relief under sections 1094.5 and
1085 of the Code of Civil Procedure. It argued the trial court should apply its
independent judgment to determine whether the District's decision was supported by the
weight of the evidence.
The District responded by claiming that the trial court should instead apply a
deferential standard of review limited to "an examination of whether the agency's actions
were arbitrary, capricious, or entirely lacking in evidentiary support."
At the hearing on the petition, the court focused on determining the proper
standard of judicial review. As the court explained, it believed "the linchpin of this
analysis is whether this is quasi-legislative or quasi-judicial." The court expressed its
belief that if the District's decision was quasi-judicial and the heightened standard of
review applied, it did not believe the District made the necessary findings to support its
denial of the charter renewal petition. In the end, the court conceded this was a "very
close case," but concluded the District's decision was quasi-legislative. Applying the
deferential standard of review, the court then denied the writ petition.
The court subsequently entered a judgment in favor of the District. The Academy
appeals.
5 DISCUSSION
I. The District's Motion to Dismiss
As a preliminary matter, the District filed a motion to dismiss the Academy's
appeal, claiming that since the Academy did not open for the new school year in the fall
of 2017 and began the closure process, the pending appeal was rendered moot. It further
contends that the issues raised on appeal do not involve matters of "continuing public
interest" warranting adjudication of the appeal despite the alleged mootness.
In opposition, the Academy rejects the contention that this court cannot offer any
effective relief. It admits that its school is no longer operating and the District has
retaken the physical school site, but contends this "interim lapse" in operation does not
preclude effective judicial relief by compelling the District to reconsider the Academy's
renewal petition or to find that the Academy's petition was renewed by operation of law.
"An appeal should be dismissed as moot when the occurrence of events renders it
impossible for the appellate court to grant appellant any effective relief." (Cucamongans
United for Reasonable Expansion v. City of Rancho Cucamonga (2000) 82 Cal.App.4th
473, 479 (Cucamongans).) Here, the parties fundamentally disagree on whether the
closure of the Academy after this appeal was filed renders it impossible for this court to
grant any relief.
Although it will undoubtedly be difficult for the Academy to reopen if it succeeds
in this judicial action, the District does not establish that it would be impossible for the
Academy to do so.
6 In the end, however, we need not resolve this largely factual dispute. "[T]here are
three discretionary exceptions to the rules regarding mootness: (1) when the case
presents an issue of broad public interest that is likely to recur [citation]; (2) when there
may be a recurrence of the controversy between the parties [citation]; and (3) when a
material question remains for the court's determination [citation]." (Cucamongans,
supra, 82 Cal.App.4th at pp. 479-480.)
The issues raised in this appeal regarding the proper standard for judicial review of
a school district decision denying a charter school renewal petition are of broad public
interest and likely to recur. Additionally, if the District is correct that a charter school's
judicial action challenging the denial of its charter renewal petition becomes moot as
soon as a new school year starts, such controversies are likely to evade normal appellate
review. Thus, even if the appeal is now moot, exercising our discretion to decide the
issues presented is particularly appropriate. (Chantiles v. Lake Forest II Master
Homeowners Assn. (1995) 37 Cal.App.4th 914, 921.) Accordingly, the motion to dismiss
the appeal is denied.
II. Quasi-Judicial vs. Quasi-Legislative
Turning to the merits, the central issue on appeal is the proper standard of judicial
review for a district's decision to deny a charter school's renewal petition. This issue of
first impression turns on whether the District's decision was quasi-legislative—
reviewable via a traditional mandamus action—or quasi-judicial—reviewable via an
administrative mandamus action.
7 A traditional mandamus action proceeds under section 1085 of the Code of Civil
Procedure and recognizes that quasi-legislative decisions of administrative agencies are
entitled to greater deference. "Judicial review of a legislative act under Code of Civil
Procedure section 1085 is limited to determining whether the public agency's action was
arbitrary, capricious, entirely without evidentiary support, or procedurally unfair." (San
Francisco Tomorrow v. City and County of San Francisco (2014) 229 Cal.App.4th 498,
509.)
A petition for a writ of administrative mandate, on the other hand, presents "the
questions whether the respondent has proceeded without, or in excess of, jurisdiction;
whether there was a fair trial; and whether there was any prejudicial abuse of discretion.
Abuse of discretion is established if the respondent has not proceeded in the manner
required by law, the order or decision is not supported by the findings, or the findings are
not supported by the evidence." (Code Civ. Proc., § 1094.5, subd. (b); Fukuda v. City of
Angels (1999) 20 Cal.4th 805, 810.)
An administrative decision is considered quasi-adjudicatory when the decision is
"made as a result of a proceeding in which by law (1) a hearing is required, (2) evidence
is required to be taken, and (3) discretion in the determination of facts is vested in the
inferior board." (Eureka Teachers Assn. v. Board of Education (1988) 199 Cal.App.3d
353, 361.)
"As a general matter, an 'administrative action is quasi-legislative' when the
'administrative agency is creating a new rule for future application . . . .' " (20th Century
Ins. Co. v. Garamendi (1994) 8 Cal.4th 216, 275.) "By contrast, an 'administrative action
8 is . . . quasi-adjudicative' when the 'administrative agency . . . is applying an existing
rule to existing facts.' " (Ibid.) "[T]he distinction between the quasi-legislative and
quasi-judicial decision contemplates the function performed rather than the area of
performance; the breadth or narrowness of the discretion cannot control." (Pitts v.
Perluss (1962) 58 Cal.2d 824, 834.)
With these legal standards in mind, we consider the function performed by the
District within the applicable statutory framework. The Legislature authorized the
creation of charter schools when it enacted the Charter Schools Act of 1992. (United
Teachers of Los Angeles v. Los Angeles Unified School Dist. (2012) 54 Cal.4th 504, 521
(United Teachers).) "The charter school legislation sought to encourage educational
innovation by creating schools that would be 'free from most state laws pertaining
uniquely to school districts.' [Citation.] At the same time, 'charter schools are strictly
creatures of statute. From how charter schools come into being, to who attends and who
can teach, to how they are governed and structured, to funding, accountability and
evaluation—the Legislature has plotted all aspects of their existence.' " (Ibid.)
The Legislature created the rules that apply to the process for establishing a new
charter school, as detailed in section 47605. "The first step, set forth in subdivision (a), is
submission to the governing board of a school district a petition signed either by 'a
number of parents or legal guardians of pupils that is equivalent to at least one-half of the
number of pupils that the charter school estimates will enroll in the school for its first
year of operation' or by 'a number of teachers that is equivalent to at least one-half of the
number of teachers that the charter school estimates will be employed at the school
9 during its first year of operation.' (§ 47605, subd. (a)(1)(A) & (B).)" (United Teachers,
supra, 54 Cal.4th at p. 521.) "The petition 'shall include a prominent statement that a
signature on the petition means that the parent or legal guardian is meaningfully
interested in having his or her child or ward attend the charter school, or in the case of a
teacher's signature, means that the teacher is meaningfully interested in teaching at the
charter school. The proposed charter shall be attached to the petition.' [Citation.]" (Id. at
p. 522.)
When a governing board of a school district receives a petition that clears the
signature threshold, it must hold a public hearing "on the provisions of the charter" within
30 days of receiving the petition. (§ 47605, subd. (b).) Then, following review of the
petition and the public hearing, the board must either grant or deny the petition within 60
days of receiving the petition, subject to mutually agreeable extensions. (Ibid.)
"The governing board of the school district shall grant a charter for the operation
of a school under this part if it is satisfied that granting the charter is consistent with
sound educational practice. The governing board of the school district shall not deny a
petition for the establishment of a charter school unless it makes written factual findings,
specific to the particular petition, setting forth specific facts to support one or more" of
six specific findings listed in section 47605, subdivision (b).
A school district may grant a charter for a period not to exceed five years.
(§ 47607, subd. (a)(1).) During that period, the governing board may revoke the charter
if it finds, through a showing of substantial evidence, that the charter school failed to
perform as evidenced by one of four specific violations or failures. (Id., subd. (c)(1).)
10 Before revocation, the board must notify the charter school of any violation, provide a
reasonable opportunity to remedy the violation, unless it finds the violation to constitute a
severe and imminent threat to the health or safety of pupils (id., subd. (d)), and thereafter
"hold a public hearing . . . on the issue of whether evidence exists to revoke the charter."
(Id., subd. (e).)
At the end of the initial charter period, the school must seek renewal of its petition
for an additional five-year period if it wishes to continue to operate. (§ 47607, subd. (a).)
The renewal petition is governed by the same standards that apply to the original petition,
but the governing board must consider "pupil academic achievement for all groups of
pupils served by the charter school as the most important factor in determining whether to
grant a charter renewal." (Id., subd. (a)(3)(A).) The charter school must demonstrate it
meets one of the five alternative tests for showing pupil academic achievement is
satisfactory. (Id., subd. (b)(1)-(5).)
When considering a renewal petition, the governing board "shall consider the past
performance of the school's academics, finances, and operation in evaluating the
likelihood of future success, along with future plans for improvement if any." (Cal. Code
Regs., tit. 5, § 11966.4, subd. (b)(1).) The board may deny a renewal petition only if it
"makes written factual findings, specific to the particular petition, setting forth specific
facts to support one or more of the grounds for denial set forth in Education Code section
47605[, subdivision ](b) or facts to support a failure to meet one of the criteria set forth in
Education Code section 47607[, subdivision ](b)." (Id., subd. (b)(2).) If the board fails to
11 act on the petition within 60 days of receipt, the renewal petition is deemed approved.
(Id., subd. (c).)
Considering these procedures as a whole, we believe the trial court erred in finding
the District's decision to be quasi-legislative. When reviewing the Academy's renewal
petition, the District applied standards set by existing state law and regulations to the
facts presented in the petition and gathered by the District itself. It held a public hearing
to gauge community support, allowed speakers to make their case, and then made
specific factual findings regarding the Academy's ability to operate the charter school
successfully. The District's board then passed a 62-page resolution detailing the specific
evidence supporting each of its factual findings, which in turn, supported its ultimate
decision to deny the renewal petition. Although the District was required to consider its
overarching public policy goals in reaching its decision, it was not crafting a new policy
to be applied in future cases.
To argue to the contrary, the District asks this court to follow the reasoning of
California School Boards Assn. v. State Bd. of Education (2015) 240 Cal.App.4th 838
(CSBA), to conclude that a decision concerning the renewal of a charter school is quasi-
legislative rather than quasi-judicial. In CSBA, the appellate court considered the
standards that apply to a decision by the State Board of Education concerning whether to
grant or deny an initial application for a "state charter school" pursuant to Education
Code section 47605.8. (CSBA, at p. 842.) That decision, however, is entirely
distinguishable for two important reasons.
12 First, the issue in CSBA was whether a decision on an initial charter school
petition is quasi-legislative, whereas this case involves a decision on a petition to renew a
charter school application. Even if we assume that CSBA correctly decided that a
decision on an initial charter petition is quasi-legislative, an issue not presented in this
case, a school district's decision on a renewal petition is fundamentally different. As
discussed ante, a governing board reviewing a renewal petition "shall consider the past
performance of the school's academics, finances, and operation in evaluating the
likelihood of future success, along with future plans for improvement if any." (Cal. Code
Regs., tit. 5, § 11966.4, subd. (b)(1).) The school's past pupil academic achievement is
the "most important factor in determining whether to grant a charter renewal" and the
board must apply one of five alternative tests to adjudge whether the past performance is
satisfactory. (Ed. Code, § 47607, subds. (a)(3)(A), (b)(1)-(5).) In other words, whereas
an initial petition must necessarily involve a prospective evaluation, a renewal petition is
focused in large part on a retrospective evaluation, considering evidence of the school's
past performance against objective standards to determine whether the school is likely to
succeed in the future. This determination is quintessentially adjudicatory in nature and
distinct from the decision under review in CSBA.
Second, the decision in CSBA is distinguishable because it involved a decision by
the State Board of Education concerning a statewide charter school, whereas the issue in
this case concerns a decision by a governing board of a local school district on a local
charter school. Although the process to establish a state charter school shares many
similarities with the procedure for a local charter school, the procedures are not identical.
13 Indeed, the court in CSBA noted these differences, explaining that whereas the State
Board of Education must deny a statewide charter application unless it makes certain
findings, a school district must grant a charter application unless it makes certain
findings. (CSBA, supra, 240 Cal.App.4th at p. 853.) The petitioner in CSBA relied on
this distinction to argue that even if decisions on local charter school applications are
quasi-legislative—a question not in dispute in CSBA—decisions on state charter school
applications alone are adjudicatory because they entail a more rigorous factfinding
requirement. (Ibid.) The court, however, rejected this contention, "because the
factfinding required before a school district can deny a charter school application is far
more detailed and rigorous than the general finding required to be made by the Board
before approving a state charter." (Id. at p. 853.) The CSBA court ultimately found that
because these procedural differences could be interpreted to equally support different
conclusions, there was little to draw from comparing state and local charter school
decisions as a basis to conclude whether those decisions are adjudicatory or legislative.
Similarly, we decline to rely on the CSBA court's decision regarding state charter school
decisions as a basis to conclude local decisions are identically legislative in nature.
Given these differences, our holding that a decision of a school district regarding a
charter school renewal petition is quasi-judicial does not conflict with the holding of
CSBA that the State Board of Education makes a quasi-legislative decision when it
considers a petition to establish a state charter school.
Even setting aside these distinctions, we are not persuaded by the reasoning of
CSBA. The court first relies on the general principle that the creation and alteration of
14 municipalities and local districts are fundamentally legislative decisions. Thus, because a
charter school is " 'deemed to be a "school district" ' " for funding purposes, "the approval
of a charter school creates a school district and, like the creation of any other district, is a
quasi-legislative act." (CSBA, supra, 240 Cal.App.4th at p. 846.)
Simply because certain funding allocations concerning school districts imposed by
the state constitution and statutes also apply to charter schools does not logically lead to
the conclusion that a charter school is a school district. As amicus curiae California
Charter Schools Association notes in a brief filed in this appeal, section 47610 exempts
charter schools from nearly all laws governing school districts. The applicable statutes
that govern the establishment of a charter school discuss establishing that school within
the school district, not as a school district. (See id., subd. (a)(1).) Although there is some
overlap in funding mechanisms, a charter school is not a school district.
The court in CSBA next cites the general principle that "the hallmark of a quasi-
legislative decision is that the agency's determination is informed by public policy, that
is, how the decision will affect the interests of the community." (CSBA, supra, 240
Cal.App.4th at p. 847.) The court applied that principle to conclude the approval of a
charter school petition "is a quintessentially quasi-legislative action" because the decision
"should include consideration of the charter's effects on local school districts and should
take into account public concerns regarding the proposed charter and its conditions of
approval." (Id. at p. 848.)
However, this analysis ignores the fundamental focus in distinguishing between
quasi-legislative and quasi-judicial actions on " 'the nature of the function performed.' "
15 (CSBA, supra, 240 Cal.App.4th at p. 847.) Simply because a public agency considers
public policy and the effect on a community when making a decision does not turn a
quasi-judicial function into a quasi-legislative function. Indeed, courts themselves often
grapple with public policy and the effect of decisions on the community when making
judicial decisions.
When considering a petition to establish or renew a charter school, the district's
governing board must, and should, consider public policy. But in considering the
petition, the board is performing the function of adjudging whether the charter school's
past performance and future plans fulfill the statutory requirements for the renewal of a
charter school as set forth in state law. The state Legislature created the policies that
apply to a charter school renewal petition; it is not a matter left within the quasi-
legislative discretion of local school districts. A local district governing board cannot
deny a renewal petition simply because it finds that the continued operation of the charter
school would adversely impact the community as a whole. Instead, it may deny a
renewal petition only by making at least one of several specific factual findings defined
by state law. (Cal. Code Regs., tit. 5, § 11966.4, subd. (b)(2).) Although the board
should be guided by fundamental principles of public policy, those principles are not the
dominant concern under the applicable legal framework.
As guided by the relevant statutes, the District's board was performing a quasi-
judicial action when it considered the evidence presented by the Academy in its renewal
petition, conducted a public hearing, and then issued detailed findings to support its
conclusion that the Academy failed to meet the legal standards for a renewal of their
16 charter. Accordingly, the trial court was required to consider the Academy's writ petition
pursuant to the procedures and standards applicable to administrative mandamus
proceedings under section 1094.5 of the Code of Civil Procedure. (See, e.g., American
Indian Model Schools v. Oakland Unified School Dist. (2014) 227 Cal.App.4th 258, 294-
295 [administrative mandamus procedures apply to judicial proceeding involving charter
revocation decision].)
By erroneously determining the District's decision was a quasi-legislative action,
the trial court applied an incorrect standard of review. Courts generally review an
agency's quasi-legislative action with deference to the expertise of the agency. (Shapell
Industries, Inc. v. Governing Board (1991) 1 Cal.App.4th 218, 230.) The trial court does
not reweigh the evidence and "confines itself to a determination whether the agency's
action has been " ' " 'arbitrary, capricious, or entirely lacking in evidentiary
support. . . .' " ' " (Ibid.) Administrative proceedings that are quasi-judicial in character
are reviewed under a less deferential standard, which requires the reviewing trial court to
determine whether the agency's findings are supported by evidence. (Id. at p. 231.)
In this action, the trial court did not expressly consider whether the District's
factual findings were supported by evidence, but rather simply concluded that the
District's decision was not arbitrary or capricious. Accordingly, we conclude the trial
court erred in denying the Academy's writ petition.
III. The Nature of the Academy's Right to Continue Operation of Its Charter School
The District contends that even if we conclude the trial court erred in construing
the District's acts as quasi-legislative, that error was not prejudicial such that reversal is
17 not warranted. It asserts that this court may independently review the administrative
record to determine whether the District's findings are supported by sufficient evidence to
affirm the denial of the Academy's writ petition.
As the District acknowledges, this contention requires resolution of an underlying
question concerning the proper scope of judicial review in this particular circumstance.
Depending on the nature of the Academy's right involved in the District's decision to not
renew its charter, this court conducts either a review of the District's decision to
determine whether it was supported by substantial evidence or a review of the trial
court's decision to determine whether it is supported by substantial evidence. The
District's argument of harmless error relies on its belief that this court may independently
examine the administrative record to review the District's decision for substantial
evidence as a basis for bypassing any evidentiary review by the trial court. As discussed
post, we disagree with the District and conclude that given the nature of the Academy's
right involved in the District's decision to not renew its charter, we cannot reach the
merits and instead must reverse and remand to the trial court for reconsideration under
the proper standard of review.
As discussed ante, section 1094.5 of the Code of Civil Procedure governs judicial
review of an adjudicatory administrative decision. The scope of judicial review,
however, requires the court to decide which of two standards of review applies. "A trial
court's review of an administrative decision is subject to two possible standards
depending on the nature of the right involved." (SP Star Enterprises, Inc. v. City of Los
Angeles (2009) 173 Cal.App.4th 459, 468.)
18 "If the administrative decision substantially affects a fundamental vested right, the
trial court must exercise its independent judgment on the evidence. [Citations.] The trial
court must not only examine the administrative record for errors of law, but must also
conduct an independent review of the entire record to determine whether the weight of
the evidence supports the administrative findings. [Citation.] If, on the other hand, the
administrative decision neither involves nor substantially affects a fundamental vested
right, the trial court's review is limited to determining whether the administrative findings
are supported by substantial evidence." (Wences v. City of Los Angeles (2009) 177
Cal.App.4th 305, 313 (Wences).)
This distinction arises from the separation of powers doctrine. As our Supreme
Court explained, the "development of a huge administrative bureaucracy" with quasi-
adjudicative powers was met with suspicion and fear by the courts that "the burgeoning
bureaucracy would endanger the prevailing concepts of individual rights." (Bixby v.
Pierno (1971) 4 Cal.3d 130, 142 (Bixby).) Accordingly, courts determined that
deprivation of these individual rights by an agency cannot be shielded from judicial
protection. "By carefully scrutinizing administrative decisions which substantially affect
vested, fundamental rights, the courts of California have undertaken to protect such
rights, and particularly the right to practice one's trade or profession, from untoward
intrusions by the massive apparatus of government. If the decision of an administrative
agency will substantially affect such a right, the trial court not only examines the
administrative record for errors of law but also exercises its independent judgment upon
the evidence disclosed in a limited trial de novo." (Id. at p. 143, fns. omitted.)
19 "The courts must decide on a case-by-case basis whether an administrative
decision or class of decisions substantially affects fundamental vested rights and thus
requires independent judicial review." (Bixby, supra, 4 Cal.3d at p. 144.) In this
analysis, courts must "consider the nature of the right of the individual: whether it is a
fundamental and basic one, which will suffer substantial interference by the action of the
administrative agency, and, if it is such a fundamental right, whether it is possessed by,
and vested in, the individual or merely sought by him. In the latter case, since the
administrative agency must engage in the delicate task of determining whether the
individual qualifies for the sought right, the courts have deferred to the administrative
expertise of the agency. If, however, the right has been acquired by the individual, and if
the right is fundamental, the courts have held the loss of it is sufficiently vital to the
individual to compel a full and independent review. The abrogation of the right is too
important to the individual to relegate it to exclusive administrative extinction." (Ibid.)
A right is fundamental "on either or both of two bases: (1) the character and
quality of its economic aspect; (2) the character and quality of its human aspect."
(Interstate Brands v. Unemployment Ins. Appeals Bd. (1980) 26 Cal.3d 770, 780.) "The
ultimate question in each case is whether the affected right is deemed to be of sufficient
significance to preclude its extinction or abridgement by a body lacking judicial power."
(Id. at p. 779, fn. 5.)
Here, the District's decision to not renew the Academy's charter had the practical
effect of closing the school. In that sense, it is indistinguishable from administrative
decisions involving the revocation of a professional license or business permit, which
20 courts have consistently held to affect a fundamental right. (See, e.g., Coe v. City of San
Diego (2016) 3 Cal.App.5th 772, 787 [decision to revoke business permit]; Goat Hill
Tavern v. City of Costa Mesa (1992) 6 Cal.App.4th 1519, 1529 (Goat Hill) [decision
affecting a business owner's "right to continue operating an established business in which
he has made a substantial investment"]; San Benito Foods v. Veneman (1996) 50
Cal.App.4th 1889, 1897 [suspension of food processing license constituted a fundamental
vested right because license "was crucial to plaintiff's economic viability as a food
processor"].)
The Academy's right to operate its charter school was also vested. The charter
school had been open and operating since 2010. The legal requirement that the Academy
seek renewal of its charter every five years does not mean the right to operate the charter
school was not vested. In Anton v. San Antonio Community Hospital (1977) 19 Cal.3d
802 (Anton), the Supreme Court rejected a similar argument in a case involving the
nonrenewal of a physician's hospital privileges. (Id. at pp. 823-824, superseded by statute
on other grounds as noted in Fahlen v. Sutter Central Valley Hospitals (2014) 58 Cal.4th
655, 678, fn. 11.)
In Anton, the hospital argued that "the right to medical staff membership and
associated privileges cannot be considered vested for more than the term of the
appointment, and that upon expiration of the term the physician becomes comparable to
an applicant for a license or franchise and wholly without a vested right to
reappointment." (Anton, supra, 19 Cal.3d at p. 824.) The court rejected this argument
for multiple reasons, most significantly on "consideration that a hospital board, through
21 its act of initially admitting a physician to medical staff membership, has thereby, in the
exercise of its discretion, necessarily determined his fitness for such membership at the
time of admission and granted him the full rights of membership. The fact that review of
this appointment is made mandatory on an annual or biennial basis (through a statutory
requirement of reappointment at that interval, as determined by the hospital's bylaws) can
by no means be said to render it probationary or tentative in effect. [Citation.] In short,
the full rights of staff membership vest upon appointment, subject to divestment upon
periodic review only after a showing of adequate cause for such divestment in a
proceeding consistent with minimal due process requirements." (Id. at pp. 824-825, fn.
omitted; see Goat Hill, supra, 6 Cal.App.4th at pp. 1519, 1526 [decision to not renew a
business's permit involves a vested right because it " 'affects a right which has been
legitimately acquired or is otherwise vested' "].)
The same analysis applies here. The Academy's right to continue operating its
charter school vested upon the District's approval of its initial charter petition, and the
fact that review of the charter occurred every five years through a statutory requirement
did not render it a temporary right. As discussed ante, the District could revoke or
decline to renew the charter only after holding a hearing, considering the evidence, and
making specific factual findings. Absent such findings, the charter renewed
automatically. (Cal. Code Regs., tit. 5, § 11966.4, subd. (c).)
Accordingly, we conclude that a school district's decision to deny a charter school
renewal petition substantially affects a fundamental vested right and, thus, requires
independent judicial review.
22 The trial court, however, did not provide independent judicial review.3
Accordingly, judicial review at the appellate level is precluded. When the trial court is
required to exercise its independent judgment on the evidence, we review the trial court's
decision to determine whether its determination is supported by substantial evidence.
(Wences, supra, 177 Cal.App.4th at pp. 305, 318.) In making that determination, we
must resolve all conflicts and indulge all reasonable inferences in favor of the party who
prevailed in the trial court. (Ibid.; citing Barber v. Long Beach Civil Service Com. (1996)
45 Cal.App.4th 652, 659-660.)
The trial court's failure to apply the proper standard of review precludes this court
from reaching the merits of the appeal. The matter, therefore, must be remanded to the
trial court for reconsideration under the proper standard of review. (Wences, supra, 177
Cal.App.4th at p. 318.)
3 The Academy suggests in its briefs that the trial court opined it would have found the District's factual findings to be insufficient to warrant nonrenewal of the charter. The trial court's comments, however, were not a thorough and considered application of the independent judgment standard. We therefore decline to give these comments any credence. (See, e.g., Saraswati v. County of San Diego (2011) 202 Cal.App.4th 917, 929, fn. 8.) 23 DISPOSITION
The judgment is reversed and the matter remanded to the trial court with directions
to reconsider the Academy's writ petition under the independent judgment standard of
review. The Academy is entitled to recover its costs on appeal.
HUFFMAN, Acting P. J.
WE CONCUR:
AARON, J.
DATO, J.